By Mary Ellen Podmolik, Chicago Tribune reporter

June 26, 2012
The question of who is responsible for the costs associated with foreclosed homes has once again surfaced in Illinois courts.

First, and still unresolved, is the dispute centering on whether Fannie Mae and Freddie Mac are required, as the owners of foreclosed properties, to pay fees to register and maintain vacant buildings in Chicago.

Now the issue is the real estate transfer taxes that are paid to Illinois counties and the state when a property changes hands and the transaction is recorded.

In both instances, the Federal Housing Finance Agency argues that Fannie Mae and Freddie Mac, the enterprises it oversees, are exempt from local and state rules and paying the monies would interfere with the agency's job to preserve and protect taxpayer assets.

Cash-strapped local governments, however, claim Fannie Mae and Freddie Mac are skirting their responsibilities at a time when every dime that comes into a government's coffers counts.

"If you took every recorder's office and found out what (Fannie Mae and Freddie Mac) owed the state, that would help the state immensely," said Karen Stukel, Will County recorder. "It's not going to fix the state of Illinois, but it's going to help them. Anything owed to them would be appreciated."

On Thursday, DeKalb County, in conjunction with other counties, filed suit in federal court in Rockford against Fannie Mae, Freddie Mac and the FHFA to compel them to pay what counties claim are hundreds of thousands of dollars of uncollected taxes due over the past five years. DeKalb seeks class-action status for its suit.

http://www.chicagotribune.com/business/c....

Can't they just foreclose? Or refuse to let a title get recorded without the proper fee? Is this why they're going to court?

What's the historic precident?

Yet another reason why banks are not foreclosing on those who have stopped paying their mortgages. The banks would have to pay the property taxes as well as for the upkeep.

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Yet another reason why banks are not foreclosing on those who have stopped paying their mortgages. The banks would have to pay the property taxes as well as for the upkeep.

Yup. I have 2 people on my block who have not paid a mortgage payment for 2+ years. Both banks are technically up for sale, through the bank. Niether has a for sale sign on it or can be found in the mls. Apparently there is a nother listing, which banks and brokers keep quiet about. BUT, both houses need to sell for $385K and $375K, to suffice the mortgage. Both houses currently appraise for about $305K. My neighbors are not going anywhere...anytime soon. They continue to pay their taxes, and the town/countly leaves them alone.

I would rather see them stay in their homes, otherwise my neighborhood will begin looking like Detroit.

Funny that governments don't want to pay taxes to other governments. Of course you are expected to else they will kill you

Curbyourrisk wrote..

I have 2 people on my block who have not paid a mortgage payment for 2+ years. Both houses are technically up for sale, through the bank. Niether has a for sale sign on it or can be found in the mls. Apparently there is another listing, which banks and brokers keep quiet about. BUT, both houses need to sell for $385K and $375K, to suffice the mortgage. Both houses currently appraise for about $305K. My neighbors are not going anywhere...anytime soon. They continue to pay their taxes, and the town/county leaves them alone.

Sounds like your neighbors have it figured out. The bank is too screwed to foreclose, so all it's costing them to continue living there is the property tax.

Foreclosing also means recognizing the loss.
You don't know something's real value until you try to sell it.

My MILs neighbor hasn't paid her mortgage in 4 years and hasn't paid taxes in 2. The bank could throw her out at any time, but they won't, why? Because then they would have to maintain the upkeep on the place.